A recent report from recruitment firm Hays shines the spotlight on the evolving role of the Chief Financial Officer (CFO) in the region. With input from more than 150 CFOs in Southeast Asia and six in-depth interviews with industry leaders, the report was launched in December 2024. In addition to the findings and analyses, the report also features strategies for CFOs and aspiring CFOs in an era of rapid change.
“It has been six years since our Asia-wide 2018 DNA of a CFO report, and from the economic climate to the duties required, the role has evolved almost beyond recognition,” says Tom Osborne, Managing Director, Hays Southeast Asia. “More diverse, tech-savvy, and with a keen eye on business growth, much is expected of today’s CFO. While the changes have been monumental, the position is continuing to evolve, requiring new skills and expertise. As one of our expert interviewees points out, this is the world of the CFO 4.0.”
One key development in this post-COVID report is that 55% of interviewees in Southeast Asia cited the economic environment as being a major challenge, compared to just 31% of their colleagues across Asia in the 2018 report. Despite this, they are more positive about their role, with 93% of Southeast Asia’s CFOs indicating that they would choose their career path again, up from an Asia-wide 69% six years ago.
“It is impressive to see that the number of CFOs holding ACCA qualifications has leapt from 14% in 2018 to 38% this year, reflecting the rise in globally recognised accounting standards in Southeast Asia,” says John Borneman, Regional Director, Hays Singapore. However, only 19% of CFOs are board members, compared to 31% previously. CFOs are also working longer hours, with 31% putting in 56 to 65 hours a week, up from 23% in 2018. This can be attributed to “the CFO remit being broadened to encompass a wider scope of duties”, he suggests.
The CFO has always been a key player in corporate strategy. Traditionally, the role involves interpreting the capital requirements, cash generation and earnings potential of the business plan. While this remains a critical role, today’s CFO is also expected to drive new strategic options. This evolving shift can be attributed to the changing business environment, such as the increasing use of technology, higher compliance and risk management requirements, and more complex solutions requiring cross-functional collaboration.
As well as taking a more proactive lead in driving business growth, the CFO may see information technology (IT) transformation and human resources (HR) come under his/her purview. Technology, in particular, generative artificial intelligence, holds the promise to deliver better insights, improve cycle times, create more fulfilling work, boost efficiency and lower overall costs. To get it going, HR must be onboard for talent attraction and development.
“Technology has completely altered the role, and today’s generation of CFOs is more adept at streamlining processes and increasing productivity through the utilisation of advanced tools and technology,” notes Natasha Ishak, Regional Director, Hays Malaysia. “CFOs are proving less risk-averse, allowing them to better explore innovation and growth as they come to grips with external macroeconomic factors that affect their organisations.”
As sustainability becomes a priority for businesses, CFOs are increasingly involved in driving green as well as corporate social responsibility (CSR) initiatives. This includes integrating sustainability into financial planning, measuring the financial impact of CSR efforts, and reporting on ESG performance. Recognising the sustainability mega trend, ISCA had, in a 2022 research report, already identified the Chief Finance & Sustainability Officer (CFSO) as an emerging job role, likely placed above the CFO and Chief Sustainability Officer (CSO) functions.
As the modern CFO has data insights and business oversight, he/she is responsible for the effective communication with all stakeholders from investors to board members and employees. The remit can be wide-ranging, as it may comprise working with other teams, for example, IT and operations, to identify relevant technology platforms and tools, to getting the budget approved, and the actual implementation. There is the responsibility to ensure internal and external buy-in, as well as training the people to optimise use of the new processes and systems. In terms of reporting, transparency and clarity, as well as the ability to convey the company’s strategic vision and performance, are essential for building trust and confidence.
Looking at what the future may hold, perhaps one of the most striking developments highlighted by the Hays report is the growing importance of ESG (environmental, social and governance) priorities. Some 47% of respondents consider integrating ESG into their company’s long-term strategic vision as an essential part of their future role. They also assert the importance of ESG strategies as not being mere box-ticking exercises; instead, these should be integrated and costed, to be achievable in the long term.
“Judging by how much the CFO role has changed in such a short time, we can expect to see a similar level of evolution in the years to come,” says Yoke Pei Ong, Business Director, Hays Thailand. To prepare CFOs and aspiring CFOs for such developments, the report highlights several strategies. “Identifying a mentor within your organisation to learn from comes highly recommended. In addition, growing your awareness of your organisation’s broad objectives by partnering with other departments can reap major rewards,” says Ms Ong. “As the CFO role becomes less about numbers and more about business growth, developing strong interpersonal skills and business acumen will prepare you for what the role will become in the coming years.”
© 2024 Institute of Singapore Chartered Accountants